At its meeting on April 14, 2016, the Private Enterprise Advisory Committee members continued their discussion of the responses received on the AcSB’s Exposure Draft, Subsidiaries and Investments, issued in September 2015, and agreed to recommend the following to the AcSB:
- A requirement to expense acquisition-related costs for investments subject to significant influence when the equity method is applied should be added to Section 3051, Investments, consistent with the Exposure Draft proposal to expense acquisition-related costs when the cost method is used.
- The transition provisions in Section 1591, Subsidiaries, should be amended to clarify the requirements when there is contingent consideration outstanding or the initial accounting for the subsidiary is incomplete.
- The transition provisions in Section 1500, First-time Adoption, should be amended to clarify that the amendments apply from the date of transition.
- The transition provisions in Sections 1506, Accounting Changes, and 1582, Business Combinations, should be amended to not permit prospective application of the consequential amendments to these Sections.
The Committee also discussed a proposal to provide additional clarity to the scope out of common control transactions, and agreed to recommend to the AcSB that the drafting of these amendments be revisited by staff in light of that discussion.
The AcSB will deliberate the Committee’s recommendations at its May 2016 meeting.
Review the executive summary on the AcSB's Web site.